home purchase
Me aged 63 & my wife aged 59 are staying in a joint family owned residential, where by only a small area is in my name and the rest in other family members name. Right now we are in exclusive use and the matter is disputed in family. To be on safer side i am thinking of buying a new house for mental peace. My daughter is already married but in unstable marriage at present. I have my savings to buy a outright property, but fear to leave the current residence possession due to dispute. I have invested 50% in M F and 50% in Fd. We both also have seperate PPF account other than the savings. My question whether i should withdraw all investment and buy residence of equal value or i should go for the home loan and for how much period. Can you please illustrate with tables. Thanks
At your stage of life, peace of mind matters more than anything else.
Since the current house is disputed and not fully in your name, it is sensible to secure a home that is legally yours. But I would not advise withdrawing all investments.
- Keep a safety cushion (at least 40%) in FD/PPF for emergencies and medical needs, and use the rest to buy a modest, fully owned property. If your capital is limited, go for a small house. You can continue living in your family home (which is disputed), but at the back of your mind, you know that you have a separate shelter. Let it be your emergency backup. I think this itself will give you the peace of mind you desire.
Taking a home loan at this age is risky because repayment depends on a stable income. But if you have a stable income (from business etc), you can consider a home loan as well. This will further protect your savings. Maybe you can keep more than 40%.
Avoid long-term loans.
You have three options now:
– Buy a bigger house with full cash payment. This way, you will have zero liability (no EMI), but your savings will get depleted.
– Buy a small house. This way also you will have zero liability (no EMI), but you will have more savings in your hands.
– Buy a house using a home loan (if your income is intact).
Also, consider registering the new house clearly (possibly with your wife) to avoid future disputes. Given your daughter’s situation, keeping some liquid assets is very important.
Disclaimer: This is general financial guidance. Please consult a qualified financial advisor and legal expert before making decisions.
